Lev Ratnovski

CV

• IMF, Representative for Serbia, 2024-

• IMF, Euro Area Desk, 2021-2024

• ECB, Lead Economist, 2018-2021;

• IMF, Sr. Economist, Research, 2010-2018;

• IMF, USA and Canada Desk, 2008-2010;

• Bank of England, 2006-2008;

• PhD, University of Amsterdam, 2008.

Publications

• 100 Inflation Shocks: Seven Stylized Facts  with Ari, Mulas, Mylonas, Zhao International Journal of Central Banking accepted

  • Key lessons fom 100 inflation shocks since the 1970s: inflation is persistent; premature celebrations are common; tight macroeconomic policy is key; fighting inflation pays off.

  • Coverage: FT Alphaville, Central Banking, IMF Blog, The Times, The Telegraph, Financial Post, WSJ. Columns: VOXEU, Finance and Development, SUERF Policy Brief. Cited by Isabel Schnabel (ECB) in "The Last Mile" and Joachim Nagel (Deutsche Bundesbank) in "Geldpolitik in einer herausfordernden Zeit"

• Monetary Policy and Intangible Investment  with Döttling  Journal of Monetary Economics  2023

  • Intangible investment responds less to monetary shocks compared to tangible investment. 

• Bank Capital Requirements and Lending in Emerging  Markets  with Martinez Peria and Presbitero  Journal of Banking and Finance 2022 

  • Capital requirements have little effect on lending in a buoyant EM environment.

• Credit and Fiscal Multipliers in China with Chen and Tsai  Journal of International Money and Finance 2021

  • China's fiscal multipliers are high, while the effect of credit on output is low.

• The Dynamics of NPLs in Banking Crises  with Ari and Chen  DATA   Journal of Banking and Finance 2021

  • Data on 100+ banking crises since 1990 point to major challenges in NPL resolution.  

• Fintech: What's Old, What's New?  with Boot, Laeven, and Hoffmann  Journal of Financial Stability 2021  

  • Digital innovation in finance may lead to a disintegration of the universal bank business model.

• Bank Lending in the Knowledge Economy  with Dell'Ariccia, Kadyrzhanova, and Minoiu  Review of Financial Studies 2021

  • As corporate assets become more intangible, banks lend less to firms and more to real estate.

• Bank Profitability, Leverage Constraints, and Risk-Taking  with Martynova and Vlahu  Journal of Financial Intermediation  2020

  • Profitable banks can borrow more and take risk at a higher scale.

• Bank Capital: A Seawall Approach  with Dagher, Dell'Ariccia, Laeven, and Tong  International Journal of Central Banking  2020

  • Risk-weighted bank capital of 15-23% would have prevented a majority of banking crises.

• Bailouts and Systemic Insurance  with Dell'Ariccia  Journal of Banking and Finance  2019

  • A government's commitment to shield banks from contagion may increase their incentives to invest prudently, despite moral hazard.

• Global Liquidity and Cross-Border Bank Flows  with Cerutti and Claessens  Economic Policy 2017 

  • Global liquidity is driven by US monetary policy but European bank conditions.

• Banking and Trading  with Boot  Review of Finance 2016

  • Banks may allocate too much capital to market-based activities, compromising their ability to lend.

  • Coverage: Huffington Post, Reuters (Felix Salmon), Economist (Letters).

• Bank Size, Capital, and Systemic Risk: Some International Evidence  with Laeven and Tong  Journal of Banking and Finance 2015

  • Systemic risk is driven primarily by insufficient capital in large banks.

• Liquidity and Transparency in Bank Risk Management  Journal of Financial Intermediation  2013

  • Better disclosure complements liquidity buffers by ensuring banks' market access during crises.

• Capital Regulation and Tail Risk  with Perotti and Vlahu  International Journal of Central Banking  2011

  • Better capitalized banks are less likely to accidentally breach capital requirements, and so may take more risk.

• The Dark Side of Bank Wholesale Funding  with Huang  Journal of Financial Intermediation  2011

  • The providers of wholesale funding can remain uninformed of bank fundamentals, and trigger inefficient liquidations based on imprecise public information.

  • The first paper (2008) to identify short-term wholesale funding as a source of bank vulnerability

  • Top citation for "wholesale funding" on Google Scholar.

• Bank Liquidity Regulation and the Lender of Last Resort  Journal of Financial Intermediation  2009

  • Bank may stay illiquid and gamble for LOLR support, especially when other banks do the same.

Policy papers

• Bank Profits and Bank Taxes in the EU   with Maneely

  • We document the heterogeneity across countries of recent taxes on banks in the EU in terms of tax base, rate, duration, and fiscal revenue.

• The ECB’s Future Monetary Policy Operational Framework: Corridor or Floor?  with Brandao-Marques

  • A review of the trade-offs involved in the choice of the ECB’s monetary policy operational framework.

  • "Strongly recommended" by Charles Goodhart 

• Monetary Policy Pass-Through to Interest Rates: Stylized Facts from 30 European Countries with Beyer, Chen, Misch, and others.

  • Explores the heterogeneity of the monetary policy pass-through in the post-pandemic period over time, geographies, and bank products.

• Shorter Euro Area-related pieces

  • • Financial Stability Risks in Europe EuroFi magazine (with Brandao-Mqrques and Kammer)

    • Macroeconomic policy challenges and priorities for Europe  EuroFi magazine (with Kammer and Toscani)

    • Macroprudential policy challenges in the current macroeconomic environment  Speech prepared for the ESRB Annual Conference.

• Financial Innovation and Technology: What's Old, What's New? (with Arnoud Boot, Luc Laeven, and Peter Hoffmann)  ECB Discussion Paper 2438  VOXEU  IMF Blog

  • We contrast old trends and recent developments in financial innovation, focusing on information processing and customer communication. 

• COVID-19 and Non-Performing Loans: Lessons from Past Crises (with Anil Ari and Sophia Chen)  ECB Research Bulletin 71  VOXEU

  • NPL resolution post-COVID-19 will be challenged by high public debt, low bank profitability, and weak corporate balance sheets. 

• Benefits and Costs of Bank Capital (with Jihad Dagher, Giovanni Dell'Ariccia, Luc Laeven, Hui Tong)  IMF Staff Discussion Note 16/04   

  • The marginal benefits of bank capital peak at 15-23% risk-weighted bank capital ratio.

  • Finance and Development: Capital Buffers

  • Oxford business law   IMF Blog   

• Corporate Governance of Banks and Financial Stability (with Luc Laeven)

  • Bank corporate governance reforms may be useful, but cannot substitute for strong supervision.

• Bank Size and Systemic Risk    (with Luc Laeven and Hui Tong)  IMF Staff Discussion Note 14/01 

  • IMF Blog   VOXEU   Cited by Stan Fischer

  • Large banks' market-based activities increase systemic but not standalone bank risk; offering a clear rationale for macroprudential policy.

• What Is Shadow Banking?  (with Stijn Claessens)  IMF WP 14/25

  • Defines shadow banking as "all financial activities, except traditional banking, which require a public or private backstop to operate."

• How Much Capital Should Banks Have?

  • Banks may need 18% risk-weighted capital, 9% leverage to fully absorb asset shocks of the size seen in past crises in OECD countries.

• Competition Policy for Modern Banks  IMF WP 13/126   VOXEU   Covered by Bloomberg

  • Competition policy can support financial stability by dealing with "too-big-to fail" and facilitating crisis management.

• Shadow Banking: Economics and Policy (with Stijn Claessens, Zoltan Poszar, and Manmohan Singh)   IMF Staff Discussion Note 12/12   VOXEU

  • Two key shadow banking functions -- securitization and collateral intermediation -- are economically valuable but pose systemic risk.

• New Risks in Financial Intermediation, in IMF Global Financial Stability Report  Oct 2012

  • Significant changes in the structure of the financial sector over the last decade have led to new systemic risks. 

• Externalities and Macroprudential Policy (with Gianni De Nicolo and Giovanni Favara)   IMF Staff Discussion Note 12/05  VOXEU   

  • The economic rationale of macroprudential policy is to correct risk externalities: across financial institutions and from finance to the real economy.

• Why Are Canadian Banks More Resilient? (with Rocco Huang, 2009),  IMF WP 09/152   VOXEU

  • Depository funding was a key determinant of banks stability during the 2008 crisis.

Other policy work

• At the ECB

  • Fintech analysis co-lead in DG-Research 

  • DG-Research work on post-COVID economic policy issues 

  • Support to the Capital Market Union workstreams

  • Monetary policy strategy review (with a focus on the nonbanks aspect) 

• IMF country experience

  • Desk for the Euro Area, 2021-present

  • Desk for United States (monetary policy) and Canada (monetary policy and financial sector) during 2008-2010.

  • Missions to Korea (2016: corporate restructuring, financial sector, macroprudential policies)

  • Reviewer for Ireland and Spain (2011-14), Portugal (2014-2017), Ukraine (2014-2018), Mongolia (2016), and China (2017-2018).

  • Ad hoc work on EU issues, including A Banking Union for the Euro Area  IMF Staff Discussion Note 13/01 

• IMF work on financial sector issues

  • Credit and Fiscal Multipliers in China (with Sophia Chen and Pi Han Tsai)  2017  IMF WP 17/273  IMF blog  VOX China

  • Benefits and Costs of Corporate Debt Restructuring: An Estimation for Korea (with Jae Chung) 2016  IMF WP 16/204

    • Wide news coverage, top ranked business news on Naver (the main Korean news aggregator), Economist, Yohnap TV among others

  • Global Liquidity: Issues for Surveillance, IMF Board Paper, April 2014

  • Bank Funding and Financial Stability, Chapter 3 of IMF Global Financial Stability Report, October 2013

  • Key Aspects of Macroprudential Policy, IMF Policy Paper, September 2013  See also a Background Paper

  • Progress toward a Safer Financial System, Chapter 3 of IMF Global Financial Stability Report, October 2012

  • Inflation Expectations and Commodity Prices, U.S. Article IV 2011  (with Oya Celasun and Roxana Mihet)  IMF WP 12/89   A short version 

  • A Fair and Substantial Contribution, an IMF Report to G20 on Financial Sector Taxation, 2010

  • Government-Sponsored Financial Institutions in Advanced Economies  (with Aditya Narain, 2006)  IMF WP 07/227

• At the Bank of England: 

  • Work on UK liquidity regime

  • Support to the Basel WG on Liquidity

  • Member of the ECB/CEBS taskforce on Liquidity 

Conferences and seminars; honors

Lev Ratnovski Lev Ratnovskiy